Ashika Monthly Insight Flip July 2016

FDI - WINDOW OF OPPORTUNITY
As can be witnessed from the table that the MSPs of the
major pulses have been increased yoy since 2011-12 and
while 2013-14 and 2014-15 witnessed modest increases,
2015-16 witnessed significant increase of 6-11% yoy.
The MSPs for 2016-17 have been announced and by the
initial prints suggest for an average increase of 8-9% yoy.
Thus, the simple justification for hike in food prices lies
in the increased MSPs yoy. In order to silence critics and
also to incentivise farmers, the Government increased
MSPs to increase acreage and increasing productivity of
these crops. Higher impetus towards cultivation of
leguminous pulses and oilseeds will also have additional
environmental benefits as these crops are less water
consuming and help in nitrogen fixation in the soil.
The MSP of pulses for the last 5 years (Rs./Quintal)
Pulses 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Tur 3200 3850 4300 4350 4625 5050
Gram 2800 3000 3100 3175 3500 NA
Moong 3500 4400 4500 4600 4850 5225
Urad 3300 4300 4300 4350 4625 5000
Lentil 2800 2900 2950 3075 3400 NA
Sources: Commission for Agricultural Costs and Prices (CACP)
What are the primary drivers for creeping inflation in India –
is actually a topic which economists like to debate. Of
various parameters considered, one strong candidate has
been Mahatma Gandhi National Rural Employment
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